Jeff Walker: I just mentioned that we acquired COKeM in September of 2020. They had a large facility in the Minneapolis area neighborhood there. And the lease on that major facility expires in May of 2024. And so as we progressed through the last couple years, we’ve enjoyed the benefits and the work of that that facility has produced. But at the end of the day that facility is not optimal for e-commerce fulfillment, which we were just speaking about earlier. That location in the US is not the most optimal location for quick e-commerce delivery. And so we decided to close that warehouse and consolidate that product into our Kentucky facility. Bruce also had mentioned that the arcades are staying on the West Coast, so we have all of our arcade business that was previously going to Minnesota that is staying on the West Coast and the facility there.
As far as cost savings, it’s pretty significant. Not only the simple things like the rent and taxes and utilities and so forth, but that was also running on a different computer system, a [Nordic system]. So we’ve been maintaining two computer systems and being able to retire their legacy system not only saves costs for employees and training and so forth but also with accounting and all sorts of other functions, as well as it reduces our compliance costs with respect to everything as being a public company. So that’s a big savings as well there. And the one last part I wanted to mention is, it was primarily stocking all video game product. And we would also stock video game product in Kentucky warehouse. So for instance, having the new Mario Brothers video game, we would have that available in stock in both facilities.
By having that product just in the Kentucky facility, we will overall have less inventory on hand, which will also help our inventory turns and will help to reduce our debt a little bit as well. So there’s a lot of different components that are saving there. We’re going to see the bulk of all those benefits hit us in fiscal ‘25.
Unidentified Company Representative: And our last question asks, on Slide 16, I noticed that distribution and fulfillment expenses as a percentage of sales improved from 5.42%, down to 4.12%. What is driving those improvements that adds up to the reduction of $5.2 million?
Bruce Ogilvie: I think we covered that in the first question already. Jeff, I believe you did that.
Jeff Walker: I think, Ashok had most of that question there that was answered.
Bruce Ogilvie: Yes, he did. But basically to answer the question there is just primarily was that our operation, we were able to get more efficiency in, we’ve mentioned how we’ve been putting costs, moving our arcades on the West Coast. We also introduced AutoStore where I talked about all the savings that we’re getting as far as our picking time, as far as processing time. So those are what’s contributing to all those factors. And it shouldn’t continue to improve, as Jeff just talked about with our closing of the facility in Minneapolis.
Operator: There are no further questions. I would like to turn the call back over to Mr. Ogilvie for his closing remarks.
Bruce Ogilvie: Thank you, operator. I would like to thank each of you for joining our financial results conference call today, and look forward to continuing to update you on our ongoing progress and growth. If we’re unable to answer any of your questions, please reach out to our IR firm, MZ Group, we’ll be more than happy to assist you.
Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.